Markets are shrugging off North Korea's latest missile launch

North Koreans watch a news report showing North Korea's Hwasong-12 intermediate-range ballistic missile launch on electronic screen at Pyongyang station in Pyongyang, North Korea. Kyodo/Reuters Markets were little changed after North Korea conducted a new missile launch, less than two weeks after testing what it called a hydrogen bomb.

The Japanese yen, traditionally considered a safe-haven by investors, initially climbed higher to about 109.55 per US dollar, but later tumbled. It was down by 0.6% at 110.8430 per US dollar at 8:51 a.m. ET.

Gold, another risk-off trade, was little changed at $1,330.33 per ounce at 9:26 a.m. ET.

"North Korea missile launch failed to have much impact in the capital markets," said Marc Chandler, global head of currency strategy, in commentary on Friday.

"The yen barely moved following today's North Korean missile launch having, over the course of the past week, reversed all of the safe haven gains made when tensions with Kim Jong-un flared up," said Marcel Thielant, senior Japan economist at Capital Economics, in a note to clients.

The North Korean missile was fired from an airfield near the capital, Pyongyang, at 6:57 a.m. local time and traveled eastward over Japan, South Korean military officials said.

Military officials estimated that the missile reached an altitude of 479 miles and flew for nearly 2,300 miles, surpassing the distance between Pyongyang and Guam, the closest US territory.

It was the second time in two months in which North Korea fired a projectile over Japan. Last month, North Korea launched a Hwasong-12 intermediate-range ballistic missile that passed over Hokkaido and traveled about 1,700 miles, reaching a height of nearly 340 miles.

"Recent developments in the Korean peninsula have led to an escalation in geopolitical tension," said a Morgan Stanley team led by Deyi Tan in a report first emailed out in late August but re-sent on Friday. "Risk of a disorderly resolution and broader collateral impact is a key investor concern. Another risk to watch is the spillover of geopolitical issues on trade."